Why Take Out Mortgage Protection?

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by: James Copper
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Word Count: 480
Date: Thu, 2 Dec 2010 Time: 5:18 AM
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A death or serious accident/illness can of course have a huge detrimental affect to a family as a whole. Aside from the obvious emotional consequences, the subsequent financial difficulties that can occur can largely be protected against so as not to fall into financial troubles at a time when an individual may feel least able to cope with them.

Of course no amount of money can bring back a loved one who has passed on or wipe away the feeling of loneliness which can subsequently be brought about. Having the right protection cover in place can go along way to being able to sustain the same quality of life as was enjoyed before and to alleviate as much unnecessary stress as possible.

For most individuals, their first experience of protection will come in the form of a term assurance policy when they take out a mortgage. In respect of this, a mortgage debt serves as a focal point for many people on the issues that may arise if the debt were not repaid in the event of a death or critical illness.

Even today, many individuals still make little or no provisions for reducing the impact of the financial turmoil that can commonly arise due to death or illness. One of the main reasons why individuals decide against making such provisions is that they believe that 'it won't happen to them'. Unfortunately, this type of attitude is contrary to government statistics that show there is a greater chance of dying or suffering from a critical illness than most people imagine. For example, according to recent government statistics, over 150,000 males aged between 20 and 65 will die in the United Kingdom. This statistic is coupled with the fact that the probability of dying before the age of 65 is about one in five for males in the UK.

In regards to critical illness cover; the largest amount of claims made on such insurance policies can be put down to Cancer, strokes and heart attacks.

- In the United Kingdom alone more than 200,000 people every year are diagnosed as suffering from cancer.
- Every year approximately 100,000 people will have a stroke
- Approximately one in six men aged between 24 and 65 will suffer a heart attack.

Very few mortgage lenders make it a condition that protection cover be taken out to cover the outstanding balance of the mortgage. This can be arranged through a mortgage lender or broker however or can even be arranged independently.

Where a person chooses not to take out protection cover, they are effectively gambling on future events in respect of their health and wellbeing. In doing so, this is almost an acknowledgement by the individual that should the worst happen, they and their family members would be financially unprepared to deal with such consequences.

About the Author

James Copper is a writer for Commercial Finance Specialists where you can find help and advice on a commercial mortgage